Newnham v. Gomis.
3 *33Present: Drieberg J. and de Silva A.J.
NEWNHAM v. GOMIS.
174—D. C. (Inty.) Colombo, 2,839.
Land acquisition—Land acquired by Municipality—With street lines laiddown—Measure of compensation—Depreciation in value caused bystreet lines—Housing and Town Improvement Ordinance, No. 19 of 1915,ss. 18 (4) and 80.
Where a Municipality acquires land in respect of which street lineshave been laid down by it,—
Held, that in awarding compensation for the land the depreciationin value caused by the laying down of street lines may be taken intoconsideration.
^^PPEAL from an order of the District Judge of Colombo.
A land belonging to the defendant was acquired by the Chairman ofthe Municipal Council by a mandate issued under the Land AcquisitionOrdinance. The Municipal Council by resolutions dated December, 1910,and November, 1918, had laid down certain street lines in respect of theland. The question for decision was whether in assessing compensationpayable for the land, the depreciation in value caused by the laying ofthe street lines should be taken into consideration.
H. V. Perera (with him E. B. Wikramanayake), for defendant, appellant.The laying down of street lines is not to deprive a person of the use of hisland, but is the first step in acquisition. The land is then required to beacquired. The postponement of the acquisition will not give the Muni-cipality an advantage. Under the Land Acquisition Ordinance we aretold that compensation is awarded on the market value at that date butwe are not told that the market value depends on the user at that date.The general principle is that where statutory power is given to a public
DE SILVA A.J.—Newnham v. Gomis.
authority to derogate from the right of a private individual it is alsosubject to the payment of compensation irrespective of such derogation.An act of the public authority in the process of acquisition cannot giveit any advantage to the detriment of the owner in respect of the amountof compensation. This is not a matter purely under the Land AcquisitionOrdinance. It is a proceeding under the Housing Ordinance into whichthe Land Acquisition Ordinance is brought for a particular purpose, i.e.,the purpose of convenience where there is a failure to effect a settlement.On general principles one must have regard to the conditions that existedwhen the Municipality took up the laying down of street lines. (19091 K. B. 16.) The Crown, for example, is not entitled to claim the benefitof compulsory dedication under section 49 of the Improvement Ordinance.(28 N. L. R. 65.) Statutes which encroach on the rights of property of thesubject must be construed by implication to carry with them the dutyto pay compensation. (Maocwell on Statutes, 7th ed., at p. 245; (1922) 24Bombay at 785.) It would be inequitable for the Municipality to seek toassess the value of the property on the depreciated basis. If the layingdown of street lines implies even an intention to acquire, then wh->nit comes to the actual acquisition the private individual can seek tobe compensated at the market value at the date of laying down thestreet lines.
Hayley, K.C. (with him J.L.M. Fernando), for the plaintiff, respondent.—A street is a road with buildings alongside it. Under our Ordinance atleast two houses are required to make a road a “ street ”. English lawspeaks of building lines, not street lines. (51 & 52 Viet. c. 52.) Seealso (1914) A. C. 1056; (1905) A. C. 1; 85 L. J. P. C. 95. This is apurely statutory matter. In the 1915 Ordinance we are told that thedate of assessment should be when the scheme is made. If the body onwhose behalf the land was acquired itself took steps which depreciatedthe value of the land, there is no provision of law which says that com-pensation must be assessed irrespective of the depreciation. (Mitter v.Secretary of State for India.')
H. V. Perera, in reply.—A street line is not a building line. Theultimate object of laying down street lines is the widening of the street.But the immediate purpose is the restriction of user. The rules forassessing compensation are laid down in Gordon on Compulsory Acquisitionof Land at pp. 79-80. The relation between the parties must be regardedas similar to those between vendor and purchaser.
May 22, 1933. de Silva A.J.—
The Chairman of the Municipal Council of Colombo acquired a blockof land belonging to the defendant on June 27, 1930, under a mandateissued under the Land Acquisition Ordinance, No. 3 of 1876. In December,1910, and again in November, 1918, the Municipal Council had byresolution laid down certain street lines, and the question that arises fordecision is whether in assessing the compensation payable the depreciationto the defendant’s land caused by these street lines should be taken intoaccount or not.
i So Cat. 194.
DE SILVA A.J.—Newnham v. Gomis.
The first point that was raised by the defendant in the lower Court wasthat street lines had not been laid down according to law. The learnedJudge has held that the street lines were duly laid in November, 1918,in conformity with the provisions of section 18 (4) of the Housing andTown Improvement Ordinance, No. 19 of 1915. Mr. Perera for theappellant stated, quite correctly I think, that he could not challenge thisfinding and I shall proceed to deal with the case on this basis.
Mr. Perera argued that the acquisition of the land must be taken to beone under section 80 of the Ordinance No. 19 of 1915 and that the layingdown of the street lines under section 18 (4) was the first step in theacquisition. He contended that the depreciation which was the resultof this step should not be taken into account in .awarding compensation.According to him the proper measure of compensation is the marketvalue at the date of acquisition of a hypothetical land exactly similar tothe land acquired except for one difference, namely, the hypotheticalland was one unaffected by the laying down of street lines. He arguedthat an interpretation of the law as favourable as possible to the personwhose land has been acquired should be adopted.
I have attempted to look at the question from a point of view asfavourable as possible to the defendant, consistently with the law, but Ifind it impossible to accept Mr. Perera’s argument.
Ordinance No. 19 of 1915, which is applicable to a number of localauthorities including Municipal Councils, consists of four parts. Part I.is headed “ Preliminary ” and consists for the greater part of definitions.Part II. is headed “ Preventive Measures ”. Part III. is headed “ Remedi-al Measures ”. Part IV. is headed “ General ”. Street lines were laidunder section 18 (4) which occurs in Part'll, of the Ordinance headedPreventive Measures. Once they were laid down certain consequencesset out in the Ordinance followed, restricting very materially the rightto build of owners of land affected by the lines. Mr. Perera has beenunable to point out, and I have been unable to find, a provision of lawin the Ordinance or elsewhere which requires a local authority to acquirethe land lying between the street lines laid down by it. No such provisionexists and no duty of acquisition is cast by law on the local authority.It is entirely free to acquire or not as it pleases. Hardship experiencedby the owners affected and loss, if any, which they suffer are matters onwhich a local authority may be persuaded to acquire, but, in the state ofthe law as I find it, are not matters upon which they can be legallycompelled to do so. The laying down of street lines is therefore not alegal step in the acquisition and is in law unconnected with acquisition,though acquisition may in fact frequently follow the laying down.
Section 80 of the Housing and Town Improvement Ordinance is thefirst section in Chapter 1. of Part IV. headed “Acquisition and Com-pensation ”. It reads: —
“Where under this Ordinance any land or building or part of anyland or building is authorized or required to be .acquired for the purposesof the Ordinance, and the amount of the compensation payable inrespect hereof is not settled by agreement, the Governor, upon theapplication of the authority seeking to make the acquisition, may
DE SILVA A.J.—Newnham v. Gomis.
declare that the land or building or the part of the land or building isneeded for a public purpose, and may order proceedings to obtainpossession of the same for the Government and to determine thecompensation to be paid to the party interested under ‘The LandAcquisition Ordinance, 1876
It is clear that acquisition proceedings can be initiated under this sectiononly in respect of land “ authorized or required to be acquired under theOrdinance The Ordinance does not require or authorize the acquisitionof land merely because it lies between street lines. If such land was“ necessary for or affected by ” a statutory improvement scheme framedand sanctioned under Chapter II. of Part III. of the Ordinance, then thescheme, and consequently the Ordinance (section 38), may authorize orrequire the acquisition of the land. In the case under considerationthere was no statutory scheme and the Ordinance did not require orauthorize acquisition. The acquisition proceedings therefore could nothave been initiated under section 80 and there is in fact no indicationthat section 80 was invoked at any time.
Section 45 (e) of Ordinance No. 6 of 1910, an Ordinance relating purelyto Municipal Councils, provides that a Council may expend its funds forthe purposes of “ construction, maintenance, extension, and alteration ofstreets, bridges, causeways, and the like ” and for the “ acquisition of landnecessary for any of these purposes ”. Section 149 provides that aCouncil may “ widen, open, enlarge, or otherwise improve any such street,making due compensation to the owners and occupiers of any land,houses or buildings which may be required for any such purposes ”.Section 152 provides that “ when there is any hindrance to the acqui-sition by purchase of any land or building required for the purpose ofthis Ordinance, the Governor, upon the application of the Council, andafter such inquiry as may be thought proper, may declare that the landor building is needed for a public purpose, and may order proceedings forobtaining possession of the same for Government, and for determiningthe compensation to be paid to the parties interested, according to anylaws which now are or which may hereafter be in force for the acquisitionof land for public purposes ”. It appears to me that the authority forthe acquisition was derived from the last named section. The “ lawsin force for the acquisition of land for public purposes” are to be foundin the Land Acquisition Ordinance, No. 3 of 1873, and a mandate wasaccordingly issued under this Ordinance. Section 21 of the AcquisitionOrdinance provides that the market value at the time of awardingcompensation shall be taken into account. Apart from this provision,in the absence of a special direction of law as to the time at which thevalue of the land should be considered in awarding compensation, theproper time would be the time of acquisition. It is not possible underthe law as I find it to go back to considerations of value which existedat some previous point of time and it is therefore not possible to take intoaccount a state of the land before the street lines were laid.
It was argued on general grounds that an owner of land which haddepreciated in value by the laying down of street lines was entitled tocompensation payable at the time of acquisition although the depreciation
DE SILVA A.J.—Newnham v. Gomis.
had occurred earlier. Whenever an Ordinance authorizes the doing ofan act, then the act is lawful and no compensation is payable in theabsence of provision that it shall be paid. The first proviso to section 18 (4)of Ordinance No. 19 of 1915 itself provides for the payment of com-pensation in circumstances which have not arisen in the case underconsideration. Mr. Perera felt, I think quite rightly, that he could notargue that compensation was payable immediately on the laying down ofstreet lines. He argued however that it became payable when the landaffected was acquired. I have already expressed the view that acqui-sition is not in law a necessary consequence of the laying down of streetlines. In fact it appears that the acquisition was authorized and madeunder an Ordinance different from the one under which the street lineswere laid. I find it impossible to accept the argument that for thepurposes of acquisition the laying down of street lines should be regardeddifferently from any other factor which has caused depreciation previousto acquisition.
In the acquisition case of Corrie v. MacDermott' the Privy Council,interpreting the word “ value ” in a deed of grant, held that it would notbear the amplified meaning of “ unrestricted value ”, i.e., value of theland free from certain restrictive conditions which had been lawfullyimposed and which existed at the time of acquisition. The principleslaid down in that case seem tp apply with even greater force in theinterpretation of a statute, and I am of opinion that the word “value"in sections 8 and 21 of the Land Acquisition Ordinance, No. 3 of 1876,cannot mean “unrestricted value". It is proper no doubt in assessingcompensation to consider the possibility of the removal of the restriction.It has been held in the case of Chairman, Municipal Council, Colombo v.Soertsz, ‘ that a Municipal Council has no power to cancel street lines oncethey are laid down. There is nothing to show that the Municipal Councilwould have cancelled the lines even if it had the power. The possibilityof their removal by some other authority is too remote to merit con-sideration.
I am of opinion that the respondent must succeed on this appeal.Mr. Orr, the Municipal Assessor, in the course of his evidence expressedthe opinion that “ it was grossly unfair ” to assess the value of land asthe respondent has done. He gave many reasons in support of his view.Mr. Hayley on the other hand pointed out that it was sometimes thepolicy of the legislature not to compensate an individual for loss causedto him by an act of a local authority done for the public good. Hecontended that there was nothing extraordinary in the existing law.These are matters for consideration by the legislature, which will nodoubt alter the law if it finds reason for doing so. It is outside myprovince to go into them. I have to administer the law as I find it.
For the reasons which I have given I dismiss the appeal withcosts.
Drieberg J.—I agree.
2 si N. L. R. 501.
> (1914) A. C. 1056.
NEWNHAM v. GOMIS